Pension Expense
Response to the following problem:
The Bailey Company has had a defined benefit pension plan for several years. At the end of 2010, the company's actuary provided the following information for 2010 regarding the pension plan:
(1) service cost, $115,000;
(2) expected return on plan assets, $14,000;
(3) amortization of net loss, $2,000;
(4) interest cost on projected benefit obligation, $16,000; and
(5) amortization of prior service cost, $4,000.
The company decides to fund an amount at the end of 2010 equal to its pension expense.
Required:
Compute the amount of Bailey Company's pension expense for 2010 and prepare the related journal entry.